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Supreme Court Hears NAFTA Truck Case

Apr 26, 2004

In November 2002, President George W. Bush lifted a trade moratorium that had blocked Mexican motor carriers from certain operations in the United States. That action, which was taken to meet provisions of the North American Free Trade Agreement (NAFTA) and comply with a ruling by an international arbitration panel became the subject of action in the Ninth Circuit court. That court held that the Federal Motor Carrier Safety Administration (FMSCA), which had issued regulations applying U.S. safety regulations to Mexican motor carriers that would be permitted to operate in the US, had not satisfied requirements to review the environmental effects of the action. The court of appeals concluded that FMSCA had to study the air quality issue before it could establish safety regulations governing the operations of Mexican motor carriers.

The U.S. Dept. of Transportation (DOT), which includes the operations of the FMSCA, contends the court of appeals' decision is incorrect. It stated the determination to allow cross-border operations by Mexican carriers was "the result of the joint exercise by Congress and the President of their constitutional responsibilities for foreign trade and foreign relations, and was made in accordance with NAFTA obligations and pursuant to statutory provisions vesting trade authority directly in the President."

DOT further argued that when Congress established the two-year moratorium that blocked Mexican and Canadian carriers from obtaining certification to operate in the U.S. in 1982, it authorized the President to extend or to lift of modify the moratorium if he determined doing so was in the national interest.

The U.S. entered into a bilateral understanding with Canada shortly after the moratorium went into effect, and President Reagan lifted the moratorium on new grants of operating authority for Canadian carriers. But Presidents Reagan, Bush, and Clinton each extended the moratorium against Mexican motor carriers.

As the Interstate Commerce Commission (ICC) Termination Act of 1995 went into effect, Congress recodified the statute authorizing Presidential restrictions to remain in effect unless and until the President made an express determination to continue, remove, or modify those restrictions. Opponents to lifting the moratorium said the FMSCA had not conducted an adequate environmental assessment and, therefore, provisions of the U.S. Clean Air Act (CAA) and National Environmental Policy Act (NEPA) were not met. The petitioners, including Public Citizen and the Brotherhood of Teamsters, want the U.S. Supreme Court to consider whether Presidential foreign affairs and foreign trade action is exempt from environmental review requirements under the CAA and NEPA. They argue the North American Free Trade Agreement provided that U.S. law would prevail where conflicts exist.